Did Your Pocket Get Picked by a Fannie Mae Employee?

“Honesty is the best policy – when there is money in it.” – Mark Twain

Fannie Pick pocket

Would you be surprised to learn that Fannie Mae employees are selling REOs listings to brokers for kickbacks? Investigators are examining whether soliciting illegal payments is a common practice at Fannie Mae’s Irvine, California office.

Shouldn’t the office of Fannie Mae foreclosure “specialists” be deciding which brokers receive which listings based on the broker’s knowledge of the particular market and types of clients they service, not based on who’s willing to get their hands dirty for a shot at a bigger paycheck? It’s frustrating to see some brokers play by the rules and still get the short end of the stick.

Armando Granillo, a foreclosure specialist at mortgage giant Fannie Mae was taken into custody after a sting operation exposed him for attempting to receive a kickback of $11,200 in solicitation for foreclosure listings to brokers.

Granillo was one of 50 employees in Fannie Mae’s Irvine office responsible for moving thousands of homes in Western states off Fannie’s books through foreclosure sales. He and his office were given the power to decide who can market homes most effectively, what to spend on rehab and maintenance, how to deal with liens of properties, and whether to accept bids from potential buyers presented by brokers.

In the exchange with one particular broker, investigators allege Granillo demanded 20% of the broker’s commissions in exchange for the listings. He promised the broker they’d “put other realtors in Tucson out of business.” He has been charged with three counts of fraud charges, to which he has pleaded not guilty, and remains free on bond, pending trial scheduled for August 6th in the U.S. District Court in Santa Ana.

Granillo asserts that such kickbacks were “a natural part of the business,” like getting baseball tickets for closing a deal.

Cecelia Carter, a former foreclosure specialist in Irvine, filed a wrongful termination suit against Fannie Mae who fired her in 2011, contending that it was because of her attempts to expose the kickback scheme. She argues that the company failed to address her grievances about numerous errors and oversights, including marketing homes without clear title and assigning brokers to list homes in markets in which they were unfamiliar.

What are your thoughts on this level of widespread corruption within the foreclosure offices of Fannie Mae? Share your thoughts below. Read full story here.

  • Anonymous

    This is old news but its nice to see finally in a national forum. It’s been happening in Bakersfield, Ca for years which is serviced by the Irvine office mentioned in the article. It is so blatant and obvious that it almost seemed as if it was Fannie’s policy, the asset managers didn’t seem to mind who knew as if they were untouchable. Personal relationships, drinking parties, and even shopping sprees were the norm. The brokers receiving the listings acted bragadocious receiving asset assignments before some brokers who had nearly 20 years experience with Fannie Mae prior to the housing bubble bursting.

    • Over Qualified Agent

      Totally Agree!

    • tired of whiners

      It is unfortunate that one bad employee is giving the whole branch a bad name. I also am from the Bakersfield, CA market but only was able to become a listing broker after some of the brokers with 20+ years experience started doing a horrible job. The REO industry used to be a “good ole boys club” and the sellers received terrible service because of this. At times I have been one of Fannie Mae’s top agents in the area due to excellent performance and at others times when my scorecard dropped I have went months with no assets. On both ends of the spectrum I never saw or heard of anything even vaguely unethical. It was actually so far the opposite that I sent Christmas cards that were returned by Fannie Mae due to that being against their policy.
      I think most of these allegations and rumors come from brokers who choose to gossip and complain instead of working harder to improve their performance. Real estate is and always be a competitive industry and unfortunately instead of shifting with the market and providing better service many brokers choose to complain instead. We have all seen these people.
      I truly hope as an industry we can quit hating the successful and searching for flaws and instead be happy for our peers while working to elevate our game.

      • It happened to me too

        Some newer agents are as good as some veterans and some veterans suck. But you were hired because they needed more people. Not because the veterans suck. Performance doesn’t matter. I had exceptional performance. But like Cecelia Carter I started asking questions and went to management and was terminated. I have had over a dozen different sales reps both in Dallas and Irvine. It’s wide spread.

      • guest

        You are so wrong.

      • Guest

        I knew there would be a comment from one of the Keller Williams agents… You can tell it’s a Keller Williams agent by use of “shifting with the market” but more than that most of the contracts in Bakersfield were awarded to Keller Williams agents. When the spotlight was shined on this fact they simply added more KW branches under each individual agents name. Check the MLS or DRE this is no secret. What may be a surprise to some though is not only kickbacks from Asset Mgr to broker, but also agent to agent kickbacks. One listing agent for Fannie can refer another agent and get them in as a Fannie Mae listing agent. In return the referring agent collects kickbacks on every listing they sell. Not a bad deal I guess, especially if you have no ethics or morals….

    • guest

      If you know what is going on in Bakersfield please contact the Federal Prosecuter in Los Angeles so that the investigator may look into it.

  • Over Qualified Agent

    I always new there was something fishy going on with the REO business. It just did not make sense to me that Companies from the Orange County like ( Atlantic & Pacific Real Estate ) had Hundreds of REO listings and several homes were in the San Bernardino County or other distant Counties ? Every Agent had 80+ listings!!! WOW….. So I tried to sign up with this company cause they obviously needed the help, but because I had a Broker’s license I just happened to be OVER QUALIFIED. I just could not see how this made any sense?

    I submitted over 200 REO applications to several Banks and Asset Management Companies including those that these out of the area Real Estate Companies were receiving their listings from, but never got acknowledged? Now I see why! I hope they catch everyone that was involved in this dirty business.

  • Roxanne

    I always wondered how agents that had no knowledge of a particular area were marketing homes at an extremely low value and they themselves were located anywhere from 2-8 hrs drive from the property. Most of those agents had never been to the property and used google earth street view photos for the listing. There should be a requirement that an agent either live within a certain range of the listing or their office be that range. Anybody can put every zip code in California as their “Specialty” location..

  • Lisa Rivera

    What a surprise (not) I have register with all banks I have done all the dances they asked and have never got a single listing all these yrs. I figure the same is going on with the Banks asset managers they are getting good cash under the table.

  • Lisa Rivera

    What a surprise (not) i figure same thing is going on with the Banks Asset managers. I have applied to evey bank done all the dances they ask and never got a single listing.

  • It happened to me too

    This is a wide spread problem. I started with Fannie in 05 and built a business through performance. I know newer and older brokers who were good and bad. But inventory distribution was lopsided in favor of newer 2-3 year brokers who were not trained did not have support staff and who’s properties look like crap. I had an impeccable performance record but i started asking questions and the same thing happened to me on Thursday that happened to Celelia Carter. It’s not just Irvine. It’s Dallas too.

    • Not a Fave

      Well
      who really knows what’s going on except the insiders at Fannie Mae, it wouldn’t
      take a rocket scientist to review who’s got what in Bakersfield. There are around
      10 Fannie Mae Brokers in Bakersfield not counting outlying areas; these chosen
      few really stand out when you review the MLS. All you need to do is pull up the
      Homepath.com web site and make a count of who’s got what. The Fannie Mae
      Survival guide is about 400 pages of do’s and don’ts and believe me some do and
      some don’t but still are in the lime light and were fed assignments by Irvine. Now that Dallas is assigning no one knows what
      was passed on to them because nothing has changed as far as I see. The score
      card pits each agent against his peers, but there are many variables that can
      make a average agent look good and make a good agent look like they are the
      worst at the table. Believe me the AM can make or break you by what is assigned
      to you. So until someone within Fannie Mae above the Irvine office looks hard
      at Bakersfield I suspect things will not change

  • Not a Fave

    Reading all these comments makes me understand why things are as they are. Is it really just all about the money? Since 2007 I have been an REO agent and got on board with Fannie Mae in 2009. At first I was given assets close to my zip code and business then as time progressed and I changed companies I still received assets but they got further form my zip code and eventually nothing in my zip code, not sure what the logic was but not wanting to get terminated I played the game. I see the signs pop up near my office but assigned to other agents newer and less experienced than I? I do realize that this chance was given to me and I did appreciated it. The cost of being a Fannie Mae direct broker is huge. Staff has to be huge too to get your money back from repairs made via 571 request and low volume assets that come along with some zips. I guess in a nut shell It is hard to believe that this system has not been fair to all the brokers hired to do their dirty work. I look at other systems such as HUD and is seems to be a fair system giving all a fair shake and there seems to be no favorite brokers there. I just can’t see why Fannie Mae Irvine can’t see what has transpired the past few years unless they just don’t want too.

    • guest

      It’s called trying to restore Fanniemae public image. It back fired.

  • Not a Fave

    Well who really knows what’s going on except the insiders at
    Fannie Mae, it wouldn’t take a rocket scientist to review who’s got what in
    Bakersfield. There are around 10 Fannie Mae Brokers in Bakersfield not counting
    outlying areas; these chosen few really stand out when you review the MLS. All
    you need to do is pull up the Homepath.com web site and make a count of who’s
    got what. The Fannie Mae Survival guide is about 400 pages of do’s and don’ts
    and believe me some do and some don’t but still are in the lime light and were fed
    assignments by Irvine. Now that Dallas
    is assigning no one knows what was passed on to them because nothing has
    changed as far a I see. The score card pits each agent against his peers, but
    there are many variables that can make a average agent look good and make a
    good agent look like they are the worst at the table. Believe me the AM can
    make or break you by what is assigned to you. So until someone within Fannie
    Mae above the Irvine office looks hard at Bakersfield I suspect things will not
    change.

    • Guest

      What I don’t understand is Fannie as a company knows the Irvine office is corrupt as evidenced by them pulling the assignment responsibilities from them. Yet the employees of the Irvine office are still employed there and it’s business as usual….

  • ms100

    Freddie Mac and Fannie Mae are as corrupt as the entire banking industry. They are so brazen and careless because they think they are too big to fail. Not only is this kick-back scheme common across the board, but the appraisers they hire to value a property before it hits the market are probably also giving kick-backs. I have personally looked in the faces of KW REO agents that conduct business illegally daily and they sincerely believe they have the right to do what they are doing.

  • The question is “Who ISNT getting kick-backs for the foreclosure listings?” Every agent I know well, who has an REO contract has openly admitted to me that they have been shaken down by their asset manager. Everyone of them.